As the saying goes, “There’s only 2 certainties in life, death and taxes”.

Separately, both can be costly, stressful and time consuming. And so when it comes to dealing with tax implications on estate planning, or in the unfortunate event of someone’s passing, there can be additional pressure if appropriate tax advice and planning was not undertaken prior.

In preparing to deal with both of these inevitable matters, there are a number of considerations when it comes to tax implications and estate planning.

As the tax landscape is an ever-changing thing, considering the effects of tax implications on any estate plan is not a set-and-forget exercise. It is important to regularly seek professional advice and opinions to review your estate plans, in the event that changes in legislation or tax applications have altered the once expected outcome.

Some of the key tax matters to be considered when it comes to estate planning include: distributions and loans; testamentary trusts; discretionary trusts; and specific assets including the family home.

Essentially, any movement or transaction of money or other assets between parties may have tax implications on the estate plan.

Distributions & Loans

When it comes to the tax effects of distributions and loans in an estate plan, you may need to consider:

  • Division 7A, Section 100A and Other Inter Entity Loan Issues
  • Family Trust Elections
  • Trustee Distributions and Discretion
  • Receiving Funds from a Foreign Trust

Testamentary Trusts & Discretionary Trusts

Dealing with testamentary trusts and discretionary trusts in an estate plan can bring additional tax considerations.

  • Tax Treatment of Assets in Testamentary Trusts – rules have changed regarding what is considered ‘excepted trust income’. This makes it harder for those who were using testamentary trusts to take advantage of tax concessions.
  • Understand when the assets of a testamentary trust are taken to be the assets of the beneficiaries.
  • Is trust splitting still allowed?
  • Consider the factors that trigger, and implications of, a trust resettlement.

Tax Impacts on Specific Assets in an Estate Plan

There are many varied components that may be applicable in regards to dealing with the tax considerations on any specific assets within an estate plan.

  • Superannuation strategies – what are the applicable tax implications for the estate both prior to, and following, death?
  • Is there a business in the estate plan? What are the tax considerations in regards to the business?
  • Tax consequences for the family home depending on how the interest in the property is transferred, or if it is realised (sold).

Expert Tax & Estate Planning Advice in One Convenient Location

To reiterate what we mentioned above, considering the effects of tax implications on any estate plan is not a set-and-forget exercise. 

As an integrated professional services firm, the team of experienced tax lawyers, tax accountants and estate planning lawyers at The Quinn Group are perfectly placed to advise on specialist tax and estate planning matters.

Contact us by completing an online enquiry form or call 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 and arrange a meeting or teleconference to discuss your individual needs.